Casper Ruud was stunned by hard-hitting American Jenson Brooksby to leave the Australian Open draw without its top two men's seeds after two rounds.
But the 24-year-old was outplayed by the world number 39 in a 6-3 7-5 6-7 (4-7) 6-2 defeat in the second round.
His exit follows injured top seed Rafael Nadal's loss on Wednesday.
Russian fifth seed Andrey Rublev suffered no such upset, beating Finland's Emil Ruusuvuori 6-2 6-4 6-7 (2-7) 6-3 to set up a third-round meeting with Britain's Dan Evans.
Brooksby, 22, took control early against Ruud with two breaks of serve in the opening set and he commanded play from the baseline in the second.
Ruud saved three match points in the third before winning a tie-break to force another set but Brooksby regrouped to break early in the fourth, sealing the win when his opponent sent a backhand long.
"Casper's a warrior, I knew it'd be a great battle out there. I was pretty confident with my level and just wanted to have fun out there and see what could happen," Brooksby said in his on-court interview.
"I was really proud of my mental resolve out there after the third-set battle didn't go my way to turn it around."
Brooksby will face Tommy Paul in the next round after his compatriot beat Spanish 30th seed Alejandro Davidovich Fokina in five sets.
The men's draw was already without last year's Wimbledon runner-up Nick Kyrgios, who withdrew before the tournament through injury, leaving Novak Djokovic as the overwhelming favourite for a record-extending 10th men's title.
The Serb is in action later on Thursday when he faces France's Enzo Couacaud in the second round. You can follow BBC radio and live text coverage of that match here.